Adopted earlier in industries like healthcare and manufacturing for real-time insights (e.g., patient monitoring, defect detection on factory lines), Edge AI is becoming increasingly important to the financial services industry.
What is AI at the Edge?
Put simply, “edge computing” refers to processing data “locally,” that is, on devices or systems near the source of the data, instead of sending it to a centralized server or the cloud to be stored and processed. When you combine AI with edge computing, you get AI at the edge—machine learning models and algorithms deployed locally.
Yes, AI is already transforming the financial services space by enabling and enhancing critical functions, such as fraud detection, transaction monitoring, risk management, and customer engagement. But much of that transformation has been fueled by centralized, cloud-based processing. AI at the Edge unlocks new opportunities for banks as AI-powered data is processed closer to where the data is generated and used. This enables faster, smarter decision-making. For community banks, which must compete with larger institutions while maintaining strong local relationships, AI at the edge can be a game-changer.
Here’s an example of Edge AI at work in the area of customer engagement. Instead of sending all customer transaction data to the cloud for analysis, an AI model running on a branch server could personalize the offer of a product or service almost instantly. The ability to process and act on data where it’s generated increases response times, strengthens customer data security, and makes banking interactions more immediate and relevant. This, of course, yields greater trust and with that, greater share of wallet.
According to Market.US, global Edge AI in financial services is expected to grow from $18.5 billion in 2024 to $322 billion in 2034. This growth is driven by the increasing demand for real-time data processing, enhanced decision-making, and improved customer experiences in the financial sector.1
Why it matters for community banks
Community banks often thrive on their ability to provide personalized service and build trust with customers. Instead of de-personalizing the customer experience—as automation often can—AI at the edge supports these strengths while also introducing new operational efficiencies in areas that can build customer trust, such as:
- Fraud prevention: Edge-based AI can flag suspicious transactions in real time—right at the point of sale or ATM—allowing for immediate intervention.
- Loan processing: AI models running locally can pre-qualify applicants during a branch visit, reducing wait times and improving customer satisfaction.
- Customer service: In-branch kiosks and video tellers equipped with AI at the edge can recognize customers, access relevant data instantly, and offer tailored assistance.
Let’s take a more in-depth look at the opportunities Edge AI presents to community banks.
Enhanced Security and Compliance
Data security and compliance are major priorities for every financial institution. AI at the edge offers advantages here as well. Because sensitive data can be processed locally, there is less need to transmit large volumes of customer information across networks to the cloud. Edge-based AI can flag suspicious transactions in real time—right at the point of sale or ATM—allowing for immediate intervention, reducing the risk of data interception or exposure during transmission.
Compliance-related tasks—such as ensuring that marketing materials meet regulatory standards—can be handled more efficiently as well. By processing and analyzing data locally, banks maintain greater control and can demonstrate adherence to regulatory demands.
Reduced Costs and Latency
For many community banks, technology investment decisions hinge on cost. AI at the edge can be more cost-effective than cloud-only solutions in certain use cases. While cloud computing offers scalability, the cost of transmitting, storing, and processing massive amounts of data off-site can add up quickly. By handling more processing locally, banks can reduce bandwidth requirements and minimize ongoing operational expenses.
Latency, that is, the delay between data input and actionable output, is another factor. In situations like fraud detection, where every second matters, AI at the edge can respond instantly without waiting for data to travel back and forth between the branch and the cloud.
Personalization at points of interaction
One of the most exciting opportunities AI at the edge offers community banks is hyper-personalization in real time. Imagine a customer walking into a branch and using a self-service kiosk. AI at the edge could immediately access their account history, current product usage, and recent inquiries to deliver targeted offers—whether it’s a new savings account promotion or a refinancing option—right on the spot. Similarly, at an ATM, a small-business customer might see options related to business loans, or the father of a young family might receive home mortgage prompts.
Supporting the human touch
Community banks pride themselves on personal relationships. Far from replacing human interaction, AI at the edge can enhance it. By equipping branch employees with real-time insights into customer needs and behaviors, for instance, banks can empower their teams to have more informed, meaningful customer engagements. A relationship manager meeting with a customer could be alerted—via an AI-powered branch system—that the customer recently inquired about home improvement loans online. This gives the banker an immediate opportunity to guide the conversation in the direction of their choosing.
Practical steps for community banks
Adopting AI at the edge doesn’t require a complete overhaul of a bank’s technology infrastructure. For starters, community banks can:
- Deploy AI-powered fraud detection at ATMs and point-of-sale terminals.
- Equip in-branch kiosks with AI-driven personalization capabilities.
- Integrate AI into loan processing to deliver faster pre-approvals.
- Enhance compliance monitoring by running AI models locally to verify content and processes.
The Future is Closer Than You Think
AI at the edge is not just a technology trend. It’s a strategic opportunity for community banks to modernize operations, deepen customer relationships, and compete more effectively. With real-time processing, enhanced security, and improved personalization, community banks can deliver the speed, relevance, and trust that customers expect, all while enhancing the human connection that sets them apart from their competitors.
Several major players are actively providing Edge AI solutions to the financial services industry, including Microsoft, Google, and Amazon. Amazon Web Services (AWS), for instance, last year launched an advanced Edge AI platform specifically for the financial services sector.
As edge AI technology becomes more accessible and cost-effective, forward-thinking community banks will embrace it not as a replacement for their relationship-driven model, but as a powerful enabler of it. In doing so, they will be better positioned to grow both wallet share and mind share in the communities they serve.
Bank Marketing Center
We’re Bank Marketing Center, the leading, subscription-based provider of automated marketing services to community banks. Our goal is to help bank marketers with topical, compelling communication with customers that builds trust, relationships, and revenue. And we do this through automating critical bank marketing functions, such as content creation, social media management, digital asset management and, of course, content routing. All of which contribute to a community bank’s ability to create and distribute content without fear of fines, brand damage, or fleeing customers.
We also want to share what we know—and learn along the way—with all our community banking friends. Whether it’s the latest on AI technology, suggestions on how to attract and retain top talent, or the importance of data protection, we’re here to make bank marketing the best that it can be. The opportunities offered by AI at the Edge, for instance … this interests us and we hope, interests you.
Want to learn more about what we can do for your community bank and your marketing efforts? You can start by visiting bankmarketingcenter.com. Then, feel free to contact me directly by phone at 678-528-6688 or via email at nreynolds@bankmarketingcenter.com. As always, I welcome your thoughts.
1Market.US Scoop. The Edge AI in Financial Services Market Growth By USD 322.81 Billion. February 20, 2025.